Six Credit Unions Selected to look for Payday Loan Alternatives

NEW YORK ( COMPANY WIRE )–Nov. 10, 2004–JPMorgan Chase & Co. therefore the nationwide Federation of Community developing Credit Unions have actually selected six credit unions in five states to generate and develop options to high-cost “payday” loans for customers.

Starting year that is early next the lender will be able to work utilizing the credit unions in Ca, Illinois, Louisiana, ny and Ohio to simply help low-income customers whom now utilize short-term loans to hold them over until their next paycheck. These customers are faced with high fees and rates for loans as short as a week or two with few choices.

” Through an approval that is rigorous, we selected these credit unions due to their strong documents of enhancing the communities they provide,” stated Lewis Jones, president associated with the J.P. Morgan Chase Foundation. “These brand brand brand new lovers is going to work hard throughout the the following year to find practical options which will help customers and their own families keep a lot more of their hard-earned money.”

The funds totaling $225,000 is certainly going to (in alphabetical order):

ASI Federal Credit Union (Harahan, Los Angeles) $25,000 – ASI FCU serves people, families and organizations from five parishes in Louisiana. The credit union will introduce “APPLE” consolidation loans to greatly help people repay debts as high as $1,000 which are owed to predatory loan providers. Borrowers could have around 18 months to pay for straight back these low-interest loans, at a set apr of just ten percent. ASI will also help their people build assets while paying down their loan; a percentage of each APPLE loan payment would be put in a brand new family savings, to greatly help the user through future emergencies. Borrowers will also be expected to pledge to not borrow cash from any payday or predatory lenders for the length of these APPLE loan.

Bethex Federal Credit Union (Bronx, NY) $25,000 – For 34 years, Bethex FCU has offered communities within the Southern Bronx, where there are many more check cashers borough-wide than other monetary solutions provider. Bethex uses their APPLE grant to enhance their “Cash-in-a-Flash” system, which offers crisis loans as much as $500 without having a checking account or credit history that is good. Loans are usually available the exact same time they are required consequently they are meant to bring individuals in to the credit union where they get credit guidance, financing literacy training, as well as other development solutions.

Faith Community United Credit Union (Cleveland, OH) $50,000 – for over fifty years, Faith Community United Credit Union happens to be supplying affordable services that are financial lower income residents of Cuyahoga County, Ohio. Presently, very nearly 30 % of this credit union’s users have actually incomes underneath the federal poverty line and many people that meet with the minimum needs make use of the credit union’s “Grace” payday advances. Faith Community United uses their APPLE grant to help ease these demands for more recent users while increasing their Grace Loans by 30 %. The absolute most for the Grace Loan is $500 in virtually any and the credit union requires borrowers to save a minimum of $10 per month and show proof of employment month. Faith additionally encourages brand brand new participants to make the most of their other asset-building programs, including literacy that is financial homeownership classes.

Lower East Side individuals Federal Credit Union (nyc, NY) $25,000 – Reduced East online payday loans Hyden KY Side individuals Federal Credit Union ended up being chartered in 1986 and it is a community that is full-service credit union whoever objective is always to offer use of affordable economic solutions to all or any residents and companies into the Lower East Side of the latest York City. In line with the 2000 Census, more than half of all of the households in this area reside in poverty and about 27 % regarding the population that is local foreign-born. The credit union shall utilize their APPLE grant to supply crisis, non-renewable loans as much as $500 to any used user whom gets compensated by check. The credit union expects in order to make at minimum 500 loans that will assist as options to payday that is high-cost tax reimbursement expectation loans. The credit union additionally expects that 250 borrowers will join financial literacy classes and 200 will get counseling that is financial financial liberty.

Northeast Community FCU, Mission region FCU and Patelco CU (bay area, CA) $50,000 – Northeast Community FCU, Mission region FCU and Patelco CU have created a consortium to jumpstart monetary task and solutions one of the most underserved populations in bay area. The consortium promises to refine Northeast’s “Grace Loan” system and expand it to Visitacion Valley, Excelsior and Bayview-Hunters aim. Research reports have shown why these two linguistically and culturally diverse areas are specially at-risk to payday loan providers. The 3 credit unions will get in touch with these communities by developing a Credit Union provider Organization (CUSO) in accordance with a satellite branch workplace and industry workplaces when you look at the target communities.

Southern Side Community Federal Credit Union (Chicago, IL) $50,000 – Southern Side Community FCU is really a newly chartered credit union which has experienced significant development since starting its doorways in November 2003. Serving a location of Chicago more targeted by payday loan providers than just about virtually any, the credit union has introduced the payday that is first alternative into the Southern Side of Chicago. The credit union has modeled its approach regarding the Payday that is successful Alternative (PAL) item of Northside Community Federal Credit Union, and certainly will utilize its APPLE grant to a lot more than triple the sheer number of PALs available in 2005.

JPMorgan Chase and also the Federation continue to look for a member credit union to build up options in Texas included in a $400,000 grant announced by the financial institution earlier in the day this current year. Complete results and analysis are required into the spring of 2006.